US homes are expected to lose more than $1.7 trillion in value during 2010, according to new estimates from online real estate marketplace Zillow.com.
2010 Losses Up 63% from 2009
This $1.7 trillion estimate represents a 63% increase from the $1 trillion in value lost by the US housing market during 2009. In addition, it would bring the total value lost by US homes since the market peaked at $31.7 trillion in June 2006 to $9 trillion. The expected total value of the US housing market at the end of 2010 will be $22.7 trillion, down 5% year-over-year and about 28% lower than its peak value.
The bulk of the total value expected to be lost during 2010 occurred in the second half of the year. From January to June, the housing market lost $680 billion. From June to December, Zillow projects residential home value losses will top $1 trillion. This would represent a 47% jump in US housing market losses from the first half to the second half of 2010.
Three of Top 20 Markets Gain Value
Less than one-fourth (31) of the 129 markets tracked by Zillow showed gains in total home values during 2010. Among the top 20 largest markets, only three gained value: San Diego and Riverside, CA, and Boston, MA.
San Diego had the best performance among the top 20 US housing markets in 2010, gaining $10.2 billion in value, rising 2.3% from $368.3 billion to $378.5 billion. Riverside followed with a $7.3 billion gain, rising 1.2% from $240.6 billion to $247.9 billion.
Although the value of housing in Boston increased $10.8 billion, the most of any top 20 market, this only represented a 0.7% improvement from $521.1 billion in 2009.
Miami Has Highest Rate of Value Loss
Among the other 17 US real estate markets in the top 20, Miami-Ft. Lauderdale, FL had the highest rate of year-over-year loss, dropping 15.4% from $396.8 billion to $380.5 billion. In terms of dollar value loss, Phoenix, AZ lost $36 billion, declining from $239.4 billion to $203.4 billion (13%).
Negative Equity Increases 6%
Zillow.com research indicates declines in home values have led to increases in the percentage of homeowners in negative equity. At the end of 2009, 21.8% of single-family homeowners with mortgages were in negative equity, meaning they owed more on their mortgage than their home was worth. In Q3 2010, the last time Zillow calculated negative equity, 23.2% were underwater, a roughly 6% increase.
Home Buyers Happier than Sellers
Reflective of the real estate buyers’ market conditions in many regions in the US, satisfaction with real estate companies among home buyers has improved from 2009, while satisfaction among home sellers has declined, according to the J.D. Power and Associates 2010 Home Buyer/Seller Study.
Overall satisfaction among home buyers averages 803 on a 1,000-point scale in 2010, increasing by 12 points from 2009. In contrast to home buyer results, overall satisfaction among home sellers has declined by 40 points from 2009 and averages 742 in 2010.